Choice of card payment options costing SMEs
SMEs across the UK could be losing out on hundreds of pounds a week because of a lack of card payment options, according to new research.
Three in five SMEs cannot currently take card payments, according to Barclaycard research, meaning losses of up to £7.5bn every year.
This is despite three quarters of all retail transactions being carried out with cards, presenting lost sales opportunities for businesses.
In certain instances these losses could be manageable, but it is concerning for businesses who are losing out on valuable funding that could help to improve their cash flow.
If such issues are left unattended, the possibility of company administration or an alternative financial recovery process being required is greatly increased.
Getting a clear idea of the figures
The research suggests that SMEs lose out on around one sale per week – at an average of £182 per transaction – by not taking card payments.
This all adds up to approximately £10,884 in lost revenue every year per business and this can have a dramatic impact on businesses.
A quarter of those questioned for the research said a lack of electronic payment options was stifling growth.
Of those who chose not to offer card options, 28% said they believed it would cost too much to do so, while 11% feared the process would be too complicated.
Failing to take card payments also makes it harder to track customer buying habits – a vital part of identifying which products and services are especially successful.
“For any business, the challenge is to first secure customers' interest and then to convert the interest into sales,” said Philip McHugh, chief executive of Barclaycard Business Solutions.
“However, our research has shown that many small businesses are falling at the final hurdle and losing customers and vital revenue by not accepting card payments.”
With approximately five million SMEs in the UK, it is likely that many could face a more secure future by assessing their financial options and taking action if necessary.
By Phil Smith